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Monday, September 29, 2014

Oooh, we're getting a peek at the new online Form 471 at the USAC training.

Overall, it looks pretty slick.

First nicety: Application number and security code gets emailed to you.

First minus: It looks like they've split Block 1 into little steps like the old "Form 471 Interview." It looks like about 6 pages just to get out of Block 1. That's great for newbies filling out a form, but it will get tedious if you have multiple forms to enter, and as the system gets bogged down close to the filing window, so that it takes 2 minutes to get each new page, the tediosity will be infuriating.

First big plus: It looks like there is a single page where I can review the whole application, so the second set of eyes looking at an application doesn't have to plod through the application page by page. And that page flags any problems. Plus you can get a Print Preview of the whole form from any screen.

State LEA and State School ID has been added to Block 4. And apparently doesn't autofill. But it sounds like you can get away with leaving it blank (though who knows whether PIA will follow up).

You can upload the Item 21 attachments from a spreadsheet! Yippee! But it's not clear if you have to upload a separate spreadsheet for each FRN.

There is a cool new allocation tool, which allows you to choose which entities in your Block 4 will use the services in each FRN. I didn't see an "Add All" button, so it may get tedious to repeatedly have to click on each item on the list for each FRN.

The system for choosing how much Category Two funding to allocate to each entity looks pretty slick.

All in all, it looks pretty good. Not perfect, but probably a big improvement.

I'm at the USAC training this morning. Lots of clarifications and confirmations on how the E-Rate Modernization Order is being implemented.

So far, only one change: I had complained that a recent USAC News Brief said: "[I]f your services will be non-contracted services provided under tariff or on a month-to-month basis, you MUST wait until the FY2015 option is available online before you file your FCC Form 470."

That is no longer true. You can now use the existing 470 for month-to-month bids, too.

Tuesday, September 23, 2014

[Note from the future: in an erratum to the E-Rate Modernization Order, the FCC reversed course and now urban clusters are considered Urban. So my conclusions below are reversed.][And from still further in the future: the FCC reversed their reversal in the Second E-Rate Modernization Order by saying that only large urban clusters were Urban, so the conclusions below are correct again.]

Well, I think I have some good news for them: funding for Rural applicants will go up. But not the way they're thinking. What will drive up funding for Rural applicants? The new system for determining Rural/Urban status will create more Rural applicants in a couple of ways. First, by looking directly at MSAs, instead of looking at counties, some Rural schools which were in Urban counties will now be classified as Rural. Second, some schools in Urban areas will become Rural because the majority of schools in their district are Rural, which makes the district Rural, which means all the schools in the district are treated as Rural.

So I think we'll see the percentage of C1 funding going to Rural applicants increase, because the percentage of applicants that are Rural will increase. I'm not sure how large the effect will be, though. [Alas, schools and libraries are often built in towns instead of the countryside, which means a lot of schools in rural areas will find themselves in an urban cluster. With the change in rules, I think the shift is reversed, so there will be more Urban applicants, meaning Rural applicants will get less funding.] [Not so after the change to only large urban clusters being counted as Urban. While I think a lot of schools serving rural areas are located in small urban clusters, I don't think there are very many located in large urban clusters.]

It won't matter in C2 in the short run, because only applicants with a high concentration of poverty will get any C2 in the next 2 years, and there won't be any C2 funding after that.Rural applicants tend not to have the concentration of poverty necessary to get into the top discount levels, so C2 funding will continue to go to the big urban applicants. [The Second E-Rate Modernization sure changed that equation; everyone should be able to get C2 funding some time in the next 5 years.]

Tuesday, September 16, 2014

The FCC has unveiled a new procedure for handling some appeals. Instead of releasing an Order granting or denying appeals, for "pending matters that do not involve complicated and/or
controversial issues," the FCC will release a Public Notice with a list of winners and losers. You can see the first such list at the end of the notice.

Is this a good thing? Well, it's a lot better than secret appeal decisions. And really, it's not much a change from the brusque orders (like this one) that they've been issuing since at least 2010. It seems fine for the granting of fairly routine requests for waiver, and even some appeals.

But it doesn't seem quite right in the case of denials. Applicants presumably thought they had good reason for their waiver or appeal to be granted. To deny them with no explanation seems a bit harsh. But I guess it isn't any better if the FCC just says: "We also deny 32 requests because we find that the petitioners failed to present special circumstances to justify a waiver of the Commission’s rules." It's too bad we can't get the FCC to say, "Departure of key personnel is not a reason for a waiver" (that was the basis for the waiver request from one applicant).

Most confounding, one of the applicants (Anthony ISD) had their waiver request granted in a recent order, but denied in this order. That case seems complex enough to warrant a little explanation.

So it's not great, but if it helps clear the backlog of appeals, I'm OK with it.

If, however, they're going to try to use this as a way to quietly dispose of the 6-year pile-up of Cost-Effectiveness Review appeals, I'll be squawking loudly. I don't like the FCC practice of embedding rules in appeal rulings, but it's better than rulings that don't tell you what rules were applied.

Monday, September 15, 2014

The E-Rate Modernization Order says: "...schools in districts that seek category two funding during funding years 2015 or 2016 will be eligible to request E-rate discounts on purchases of up to $150 (pre-discount) per student for category two services over a five-year period."

So while the $150/student budget is (unfortunately) school-specific, the budget rule applies to the district. Example: if you're a district thinking that you'll wait until the $150-in-5 sunsets in 2 years (probably a foolish decision, I know), but you're building a new school next year. If you get Category 2 funding for that new school, you force all the district's schools into the $150-in-2 straightjacket.

On the other hand, it appears in my original rant, I was wrong: you don't need to spend a little in every school in the district to start the 5-year window earlier. Apparently, you just need to spend $1 in one school in 2015-2016, and the whole district's $150-in-5 window starts.

It's too bad that the $150-in-5 rule is applied district-wide, because USAC's Two-in-Five Tool would have become a delightful explosion of color if they'd had to keep track of whether each location was under the 2-in-5 or $150-in-5 Rule, then show status under whichever rule applied. Maybe I would have gotten my mauve background.

So now I guess we should call it the $150-in-5-but-you-better-spend-it-in-the-first-2-and-all-your-schools-should-apply Rule.

Sunday, September 14, 2014

Say, here's a little information on when we'll see the Form 470. It appears the FCC submitted it to OMB for approval Friday. When will we see it? Well, apparently they requested emergency processing, hoping to shorten the timeline I gave earlier, and get approval by November 3. That will get us a temporary (six-month) approval to give the FCC time to file a regular request and get permanent approval.

Will there be any comment period for the new form? Since it's an "emergency" request, the OMB can waive or modify the comment periods. My exhaustive research (10 minutes on Google and an OMB FAQ) has not determined whether it even needs to be published in the Federal Register. They have time to do a 30-day comment period and still get the approval by November 3, but I don't think we'll see one. Let's hope there isn't anything major that the FCC overlooked in putting together the form, because the OMB isn't likely to catch it.

Once the new forms are approved, how long will it take USAC to go live? For the 471, they'll have a couple of months before the window opens, but people are already looking for the new 470. I hope that the FCC has shared the new 470 with USAC already. I will make a bold prediction: the new 470 will be available on November 12th. Anyone else want to make a guess?

Friday, September 05, 2014

So I was listening to an E-Rate presentation yesterday, and the presenter mentioned that the new $150-in-5 Rule sets up a rolling 5-year window in which to spend your $150, and something occurred to me: no matter what, you want to spend some money next year. You don't see why? Check it out.

Let's take the hypothetical case of a 90% district (because only 90% applicants guaranteed to get C2 funding over the next two years) that is planning a complete upgrade of their network in FY 2016-2017 (year 2 of the Chairman's $1-billion-a-year funding goose). If they apply in FY 2016, then the 5-year window for the $150 cap starts in FY 2016, and expires FY 2020. But if they apply for funding to put a $1 patch cable in each building in FY 2015, then spend the remaining funds in FY 2016, the 5-year window for the cap starts in FY 2015, and expires in FY 2019. The budget limit ends a year earlier. So every single applicant in the program should apply for funding in FY 2015, hoping to get the 5-year window started.

Crazy, right? But of course it's not that simple. The FCC perversely chose to make the $150-in-5 cap sunset after 2 years. So unless the FCC takes action over the next 2 years, in FY 2017 those applicants who were approved for C2 funding in either FY 2015 or FY 2016 will be saddled with the $150-in-5 cap, while the rest of the E-Rate community will be back to the 2-in-5 Rule, where you spend whatever you please every 3 years.

So let's say you're thinking of doing a Wi-Fi refresh in FY 2017. If you spend $1/building in FY 2015, and the $150-in-5 stays in effect, you win: by pre-spending that $1, you moved the end of your cap up from FY 2021 to FY 2019. But if the $150-in-5 Rule expires, pre-spending the $1 means you're grandfathered into the $150/student cap, whereas if you'd just waited, you would have no cap on your FY 2017 spending.

Priority 2 funding was always a crap shoot. But now Category 2 funding is a crap shoot with new rules, which may or may not change back to the old rules on your third roll of the dice. Oh, and by your third roll, the casino probably won't have enough money to make a full payout on your bet, and may even be broke.

Normally, USAC allows us to start posting Forms 470 for the following year sometime around July 1st. This year, we're waiting for the new form. OK, how long will we be waiting? Call CSB, and they'll say it will be available "soon." Well, according to Office of Management and Budget (OMB):
"The following process is used to obtain OMB approval for an information collection.

The agency develops an information collection that it wishes to implement.

The agency publishes a Federal Register notice about the proposed information collection and provides the public with 60 days to provide comment on the proposed collection.

The agency considers the public’s comments and makes changes as appropriate to address concerns raised by the public.

The agency submits the ICR to OMB for review and publishes a second Federal Register notice announcing the start of OMB’s review. The second notice provides the public with an additional 30 days to provide comments.

After reviewing the ICR and considering public comments, OIRA concludes its review by approving the collection or taking one of the other actions noted above."

The latest rumor I'm hearing is that the draft form will be available by the end of the month. So let's make a little timeline:
Sept. 26: FCC releases the draft for public comment.
Oct. 2: The notification hits the Federal Register. The 60-day comment period starts.Dec. 1: The 60-day comment period closes.
Dec. 8: After spending a week ignoring the public comments (just kidding), the FCC sends the forms to the OMB.
Dec. 17: Notice is published in the Federal Register that the forms have been sent to OMB. The 30-day comment period starts.
Jan. 16: The 30-day comment period closes. OMB begins reviewing the forms and public comments.
Feb 11: OMB approves the form. (I can't find any guidelines for how long the OMB takes, but this seems to be about how long it took to approve the 470 changes in 2013.)

That is not an outlandish or pessimistic timeline. So if USAC is johnny-on-the-spot and releases the Form 470 the next business day, it will be available on Feb. 12.

So an applicant who isn't busy that day can file on Feb. 12, giving them an Allowable Contract Date of March 12. The latest rumors I've heard is that the window will close mid-March, so those applicants have maybe a week to select a vendor, negotiate and sign a contract, and file their Form 471.

Not to worry: a recent USAC News Brief said that we can use the old form, as long as we note in Item 13 that the form is for FY 2015-2015. But what's this notice in bold at the bottom of the News Brief? "[I]f your services will be non-contracted services provided under tariff or on a month-to-month basis, you MUST wait until the FY2015 option is available online before you file your FCC Form 470."

True, most services are going to be under contract (with telecom rates dropping so fast, service providers are desperate to lock in today's rates), but what district doesn't have a BANA circuit or POTS line for alarms or environmental controls or fax lines or whatever? So what now, I file a 470 now for contracted service, and file a separate 470 just for some stupid POTS line?

About Me

Involved with the E-Rate program since 1997, On-Tech's president, Dan Riordan, has continuously assisted schools and libraries in obtaining E-Rate funding, first as a trainer, then as a district employee, and now as an E-Rate consultant.